Business Context and Reporting Period
Precision BioSciences, Inc. (DTIL) is a clinical-stage gene editing company developing in vivo therapies for genetic and infectious diseases using its proprietary ARCUS platform. This Form 10-Q covers the quarterly period ended June 30, 2026. The Company is classified as a non-accelerated filer and a smaller reporting company. As of August 3, 2026, there were 27,601,554 shares of common stock outstanding.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
|---|---|---|
| Revenue | $10.8 million | $0.05 million |
| Net Loss | $(51.1) million | $(44.1) million |
| Operating Loss | $(28.2) million | $(44.0) million |
| Research & Development Expenses | $25.5 million | $26.4 million |
| General & Administrative Expenses | $13.6 million | $17.7 million |
| Cash, Cash Equivalents, and Restricted Cash | $112.4 million | $84.8 million |
| Debt (Loan Payable) | $22.5 million | $22.5 million |
| Warrant Liability | $36.7 million | $15.7 million |
Net Loss Per Share: $(2.02) for the six months ended June 30, 2026, compared to $(4.33) for the same period in 2025.
Material Changes vs. Prior Period
- Revenue Surge: Revenue increased significantly to $10.8 million from $0.05 million year-over-year. This was driven by a $6.8 million milestone payment from TG Therapeutics (related to the azer-cel license) and $4.0 million from a legacy agriculture industry collaboration partner.
- Operating Expense Reduction: Total operating expenses decreased by $5.0 million to $39.1 million. General and Administrative expenses dropped $4.1 million due to operational discipline and lower employee-related costs. R&D expenses decreased slightly by $0.9 million despite increased direct costs for lead programs (PBGENE-HBV and PBGENE-DMD), offset by a pause in the PBGENE-3243 program and reduced platform development costs.
- Warrant Liability Volatility: The Company recorded a non-cash loss of $21.0 million due to the change in fair value of warrant liabilities, compared to a $0.1 million loss in the prior year. This significantly impacted the net loss despite the revenue increase.
- Liquidity Position: Cash and cash equivalents decreased by $24.7 million during the period, primarily due to operating cash outflows of $25.4 million. However, the total cash position (including restricted cash) remains at $112.4 million.
Guidance, Outlook, and Risks
- Clinical Progress:
- PBGENE-HBV (Hepatitis B): Presented data at EASL 2026 showing a 1-log reduction in cccDNA-derived transcripts and durable loss of pgRNA in patients. The Company is expanding cohorts and expects updates by year-end 2026.
- PBGENE-DMD (Duchenne Muscular Dystrophy): Preclinical data supports evaluating the therapy in younger patients (ages 2-3). The Phase 1/2 FUNCTION-DMD trial is actively recruiting with initial safety data expected by year-end 2026.
- Partnered Programs: iECURE's ECUR-506 (OTC deficiency) showed 71% of participants experienced no hyperammonemic crises. TG Therapeutics achieved a clinical milestone for azer-cel in multiple sclerosis.
- Capital Resources: Management believes existing cash, operating discipline, and the ATM facility are sufficient to fund operations through 2028.
- Debt Obligations: The Company has a $22.5 million term loan with Banc of California, extended to December 31, 2029. It requires maintaining a cash security account equal to the outstanding principal.
- Key Risks:
- Significant operating losses and an accumulated deficit of $579.3 million.
- Dependence on the success of the ARCUS platform and clinical trial outcomes.
- Need for substantial additional funding to advance programs and achieve profitability.
- Volatility in warrant liabilities impacting reported net loss.
- Regulatory uncertainties regarding genome editing therapies.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $112.4 million cash balance to fund operations through 2028, considering the $22.5 million restricted cash requirement for the term loan.
- Revenue Quality: Confirm the non-recurring nature of the $10.8 million revenue, which was driven by specific milestone payments rather than product sales.
- Warrant Liability Impact: Assess the sensitivity of future net loss figures to fluctuations in the fair value of the $36.7 million warrant liability.
- Clinical Milestones: Monitor the upcoming data readouts for PBGENE-HBV and PBGENE-DMD expected by the end of 2026, which are critical for future funding and valuation.
- Debt Covenants: Review the terms of the Banc of California loan agreement to ensure continued compliance with the cash security account requirement.